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7. Local governments wrestle with state’s tax cap

December 30, 2011
By JESSICA COLLIER - Staff Writer (jcollier@adirondackdailyenterprise.com) , Adirondack Daily Enterprise

In June, the state passed a law capping property tax increases near 2 percent, throwing a kink into budgeting for many local governments, especially counties.

This was welcome news to many property owners, since New York has some of the highest taxes in the nation. But county officials across the state railed against the cap, arguing they can't stay under a 2 percent cap if the state keeps forcing them to provide specific services and meet specific standards without giving them enough money to do so. The New York State Association of Counties started a campaign called "9 for 90," meant to highlight the fact that nine state mandates make up 90 percent of county property taxes. Across the state, landowners paid about $4.4 billion total in property taxes in 2010, and $4 billion of that went to pay for state mandates, NYSAC Deputy Director Mark LaVigne said this fall when his organization held a conference in Lake Placid.

When the tax cap was passed, state officials gave assurance that mandate reform would follow. A committee was formed and a few changes were made, but most say they were only a tiny fraction of what needs to be done.

Article Photos

Town supervisors and taxpayers pack the Essex County Courthouse in Elizabethtown on the night of Dec. 5 for a public hearing on the tentative 2012 budget. In the foreground, from left, are Debra Malaney, R-Ticonderoga, Cathy Moses, R-Schroon, and George Canon, R-Newcomb.
(Enterprise file photo — Chris Morris)

A bill in the state Legislature provided a glimmer of hope to county officials this fall. It would have shifted the costs of Medicaid, the number-one most expensive mandate for counties, back to the state. In most states, Medicaid costs are a burden shouldered entirely by the state with no local payments, but New York splits its share with its counties. NYSAC and most counties jumped on board to support the legislation, but it stalled and came to nothing.

The state had allowed a caveat in its rule that if the local governing body could get a 60 percent majority (for school districts, a 60-ercent supermajority of voters), it could pass a law overriding the tax cap.

In Franklin County, legislators filed a tentative budget at the beginning of October with a 13 percent tax levy increase. They had dropped that number down to under 2 percent by the time they took the budget to hearing, but they still held a hearing on an override law. The county manager had advised them to pass an override no matter where the levy ended up because the state wasn't verifying individual tax cap calculations.

Legislators heard many residents speak out against the idea of passing an override in their public hearings, and residents also asked them to keep spending down.

Legislators eventually passed a budget with a 1.98 percent tax levy increase, but they unanimously rejected the override, having trouble even getting the resolution to the floor.

In Essex County, though, the story went the other way.

Supervisors had made serious cuts, laying off 30 employees to keep the tax levy increase to 4.3 percent. But when they brought the budget to public hearing in December, 150 people showed up and 23 spoke, all in favor of restoring funding to the budget.

Supervisors easily passed their tax cap override law 16-2, and ended up restoring many of the cuts, bringing the tax levy increase to about 10 percent.

The tax cap affected local towns as well, but it wasn't as big of an issue for them. Some towns passed an override law - Harrietstown's budget included a 9 percent tax levy increase - but most stayed well within the cap.

School districts are now preparing themselves for their battle with the tax cap, which is likely to cast a shadow over the coming spring budget season, after what have already been difficult budgeting years for many local districts, since the economic downturn began in 2008.

 
 

 

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